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Colorado has eight possible locations for Amazon headquarters bid

State won't reveal final list of eight, but local real estate experts have some ideas

By Tamara Chuang

The Denver Post

Posted:
10/04/2017 09:33:29 PM MDT

The team behind Colorado's official bid for Amazon's second headquarters narrowed potential locations to eight and is feverishly working to complete its proposal to persuade the Seattle retailer to pick the Denver area.

"We screened nearly 30 sites and reviewed over 400 documents to determine the sites that met and exceeded the eligibility of the RFP (request for proposal)," said Sam Bailey, vice president of economic development for Metro Denver Economic Development Corp. "Ultimately, we identified eight viable sites across metro Denver that enhance our competitiveness. We would have diluted our position providing every site submitted."

Within 24 hours of Amazon's Sept. 7 announcement that it was looking for a second headquarters, MDEDC, the private economic development agency representing the nine area counties, put a plan together giving cities two weeks to submit sites. The team spent last week sifting through the candidates, picked them this week and will put finishing design touches on the proposal next week.

The Colorado Office of Economic Development and International Trade will submit the bid to Amazon on Oct. 16, three days before the official deadline. The sites will be presented on equal footing — no ranking or prioritization — in order to give Amazon flexibility, Bailey said.

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Amazon wants a spot equal to its Seattle campus, which includes 8.1 million square feet of office space in 33 buildings. Over 10 to 15 years, the new location could employ up to 50,000 people making an average annual wage exceeding $100,000. The company expects to invest more than $5 billion in the new headquarters, which will host executives, managers, software and development engineers, legal staff, accountants and administrative workers.

Bailey, citing a nondisclosure agreement with Amazon, declined to divulge the final sites picked by MDEDC. The state used the same strategy successfully to attract Panasonic, Smuckers and Partners Group, a Swiss asset manager.

But real estate professionals, such as Real Estate Garage founder Steve Ferris, named some good possibilities. He lists eight in a column this week for the Colorado Real Estate Journal. But considering Amazon's urban location in Seattle, Ferris narrowed it to four: the parking lots at Elitch Gardens and Pepsi Center; a north RiNo neighborhood that includes the World Trade Center project; Upper Fox, the southwest corner of interstates 70 and 25; and the former Gates Rubber plant at South Broadway and I-25.

"These are best guesses based primarily on the sheer scale of the project," said Ferris, who previously worked in development services for the city of Denver. "In other words, nothing this big has come along before. Even United five to 10 years ago wasn't near this size. And sure, it's going to be built gradually, but the interesting thing from a technology perspective is it's a growing company. The theory of them taking over the world lends credence that they will have 50,000 employees."

Ferris said he doesn't know which sites made it into Colorado's proposal, but he said he knows that of the developers, at least five are talking to public officials about the Amazon bid.

"If I could ask Amazon anything, I would ask, 'What do you like or don't like about your current location?'" Ferris said. "Because that location (in Seattle's South Lake Union) is eerily similar to upper RiNo."

There are several sites farther from Denver's center that also are considered contenders, including the former StorageTek/Phillips 66 campus in Louisville and undeveloped land near Denver International Airport.

Because of Amazon's requirements — including a location within a 45-minute drive to an international airport — several cities in Colorado were immediately eliminated, including Colorado Springs, Durango and Grand Junction. But this doesn't mean those cities won't be included in the proposal, Bailey said.

"While they're not eligible, the case studies we've leveraged include Colorado Springs and Durango to truly make them part of the state package to Amazon," Bailey said. "We have to convey to Amazon that we're primed for HQ2. But if they have another project — a data center, other regional offices — we want to make sure this communicates not just our strengths on HQ2, but any follow-on investments."

Bailey's team this week is still adding details to enhance its proposal, sharing information about broadband availability, public transportation options, political climate, and area universities, research labs and advanced industries.

But making good estimates — such as potential incentives — hasn't been simple. Bailey said officials here have asked Amazon directly about things such as utilities and hiring plans of the potential 50,000 workers. Amazon "referred everyone back to the RFP." So the team did additional digging, such as researching Amazon's prior real estate deals in Seattle to get a better sense of when the company leases, buys and builds.

Colorado offers job growth incentives, but without knowing Amazon's hiring plans, the team had to estimate how much the company would qualify for with the state's Job Growth Incentive Tax Credit, which provides employers a credit against future state tax obligations equal to one half of its share of FICA taxes for each new employee added and retained for a year.

Those job-growth incentive credits over time could climb into the hundreds of millions of dollars, depending on how many people are hired and their pay levels. The state also has $10 million in cash set aside that can be used to match incentives offered by local governments.

Incentives from other states, however, have gone far higher. Wisconsin lawmakers recently approved up to $3 billion to lure up to 13,000 jobs from FoxConn, the Taiwanese manufacturer.

"What we benefit from is Colorado is not going to the legislature to ask for any special type of funding. We provide the same (incentive) programs to any company," Bailey said. "We want to show Amazon that we are a fiscally sound state that focuses on performance goals."

However, he added, all possible local, county and state incentives will be included in the proposal.

"Our intent," he said, "is to ensure Amazon is aware of the various ways we can offset the costs of the project."

The city of Aurora, which scored the state's first two large Amazon facilities, is, of course, hoping for more Amazon. The city submited "qualifying sites" to MDEDC, said Andrea Tilliss, marketing manager for Aurora Economic Development Council.

"We do not know whether or not we will find out if our sites were submitted," she said. "We certainly hope that we will be notified so that we can continue to support the process with our partners in Colorado to land this deal."

After the state submits its proposal, it's anyone's guess how Amazon will announce the winner or the next stage. In its documents, Amazon just said the announcement will come in 2018. But one thing Bailey knows is that Colorado had to make a proposal to Amazon.

"We're a growing community, and with that comes responsibility to make sure we plan and chase after the right types of projects," Bailey said. "More than anything, Amazon HQ2 brings thought leadership. Thought leadership helped us fund FasTracks and put DIA outside of the city knowing we'll grow to it. This company is very much aligned with the same spirit that we've pioneered in Denver."

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